Global VC investment continued to be very strong in Q3’20, defying concerns of a potential drop-off in investment due to the challenges associated with getting deals completed during a pandemic.
While the number of VC deals dropped for a sixth straight quarter, the level of investment remained high, as VC investors continued to focus on late-stage companies. Three $1 billion+ mega-deals helped to propel the global investment total in Q3’20, including raises by WM Motor in China, SpaceX in the US, and Flipkart in India.
VC investment in the US remained buoyant in Q3’20, led by a $1.9 billion raise by SpaceX. The acceleration of digital trends given the ongoing pandemic helped spur VC investment, particularly in key areas such as health care, business services, and edtech. Renewed IPO activity, including Snowflake’s $3.4 billion IPO, also helped showcase the resilience of the US market.
VC investment in the Americas remained relatively strong in Q3’20, driven primarily by VC investment in the US. VC investment in Canada was quiet during the quarter, although the IPO of payments company Nuvei on the Toronto Stock Exchange showcased the strength of Canada’s technology innovation ecosystem. In Latin America, the fintech sector continued to attract most of the attention from VC investors, led by Neobank Neon’s $300 million raise.
Venture capital investment in Europe reached a new record high in Q3’20, helped by new record levels of investment in Germany, Israel, and the Nordic Region. A diverse range of sectors attracted $100 million+ megadeals in Europe, including fintech, drug discovery, automotive, entertainment, and health diagnostics.
After two soft quarters of investment, VC investment in Asia rebounded significantly in Q3’20, led by a $1.5 billion raise by Shanghai-based automotive company Weltmeister and a $1.3 billion raise by India-based internet retailer Flipkart.